Premier Peter Malinauskas’s Whyalla hydrogen plant dream is over | Paul Starick

Labor’s Whyalla hydrogen folly was threadbare from the start and was always Mali’s biggest gamble, writes Paul Starick.

Peter Malinauskas’s $600m hydrogen pipedream was over before it really began.

In 2023, I branded the hydrogen plan the biggest gamble of the Premier’s political career so far. Now, he’s lost the bet and effectively turned it into a gas-fired electricity generator outside Whyalla.

Revealed by The Advertiser in early 2021, the “Hydrogen Jobs Plan” was Labor’s first major policy release, a year ahead of the 2022 election.

Back then, Labor was a long shot of winning as the Marshall Liberal government surfed a wave of pandemic protection popularity.

Premier Peter Malinauskas stands on Hummock Hill Lookout in Whyalla, overlooking Whyalla Steelworks, on February 17. Picture: Brett Hartwig

The hydrogen policy was a long shot too. It was underpinned by flimsy modelling, rather than detailed costings, from the respected Frontier Economics. This gave it a veneer of credibility.

But Mr Malinauskas and his troops remained doggedly fixed to the $593m “costing” for the hydrogen power plant, even as inflation and interest rates skyrocketed around the globe.

As The Advertiser often pointed out, the Labor hydrogen power plant must have been the world’s only inflation-proof project.

Premier Peter Malinauskas delivering a keynote address to World Hydrogen Summit in Rotterdam, Netherlands, on May 11, 2023. Picture: supplied.

The fantasy began to unravel just months after Labor’s landslide election victory in March, 2022.

South Australian Productivity Commission chairman Adrian Tembel, in his foreword to a 136-page report into renewable energy, said the hydrogen plan would succeed only “if the state gets everything right”. Even then, he said, “ “we will probably also need a little luck”.

Mr Tembel was right. The Premier’s luck ran out. The hydrogen power plan’s selling point transformed from forging a hydrogen export industry to powering a Whyalla green iron and steel revolution.

Premier Peter Malinauskas and Federal Minister Ed Husic talk to steelworker Matt Rogers after announcing the Whyalla steel plant will be run on hydrogen fuel, making it the first green steel plant in the world, on April 4, 2023. Picture: GFG ALLIANCE/Brenton Edwards

Pinning the Premier’s political fortunes to outgoing Whyalla steelworks operator Sanjeev Gupta was always going to be a folly, given the tycoon’s lamentable history of broken promises.

Private investors, including Andrew “Twiggy” Forrest”, have been walking away from hydrogen projects across the country.

The Premier now says the hydrogen plan has been deferred so the money can be ploughed into a $2bn-plus rescue package for Whyalla steelworks.

But he holds out hope that the government-backed hydrogen plant will play a role sometime in the future in the steelworks’ green transformation.

Don’t hold your breath.